Exposure to telecom, media, cement and construction sectors showed a sharp surge in the mutual fund portfolios in 2006, while chemicals, services, and banking stocks failed to attract much interest. Food and beverages, and consumer durables turned out to be bitter pills for MFs as the weightage to these sectors dropped by 20 per cent and 10 per cent respectively.

Meanwhile, engineering overtook information technology to become the most invested sector in 2006, while cement and construction barged ahead to the third slot from its sixth position held last year.

Dec '05

Nov '06

Sector

Value (cr)

Wght

Value (cr)

Wght

Change

% Change

Engineering

6,890

12%

12,547

13%

5,657

82%

Cement & Const

4,008

7%

9,227

10%

5,219

130%

Information Tech

7,086

12%

11,066

12%

3,980

56%

Telecom

1,288

2%

4,665

5%

3,376

262%

Oil & Gas

4,012

7%

6,577

7%

2,565

64%

Automotive

5,277

9%

7,655

8%

2,378

45%

Conglomerates

1,717

3%

3,861

4%

2,144

125%

FMCG

2,016

3%

4,007

4%

1,991

99%

Manufacturing

3,912

7%

5,626

6%

1,715

44%

Media

1,037

2%

2,641

3%

1,604

155%

Banking & Finance

6,498

11%

7,955

8%

1,457

22%

Pharmaceuticals

3,191

5%

4,600

5%

1,409

44%

Metals & Mining

2,980

5%

4,279

4%

1,299

44%

Utilities / Power

813

1%

1,533

2%

720

89%

Miscellaneous

1,541

3%

2,233

2%

691

45%

Services

1,492

3%

1,696

2%

204

14%

Chemicals

3,193

5%

3,361

4%

168

5%

Consumer Durables

213

0%

192

0%

-21

-10%

Food & Beverages

2,245

4%

1,795

2%

-450

-20%

Total

59,409

100%

95,515

100%

36,106

1294%

Engineering and cement and construction stocks were the top favourites with fund managers in 2006. A Moneycontrol study reveals that investments in engineering sector stood at Rs 12,547 crore in November 2006 as against Rs 6,890 crore (Rs 68.9 billion) in December 2005 as eight MFs hiked their exposure to this sector, while 11 funds marginally slashed their exposure to the sector. DBS Chola, Deutsche, and JM Financial MF were most bullish on the sector.

Investments in cement and construction sector stood at Rs 9,227 crore in November 2006 as against Rs 4,008 crore in December 2005 as 17 MFs hiked their exposure to this sector, while Deutsche and Principal PNB MF marginally slashed their exposure to the sector. Birla and DSP ML MF were most bullish on the sector.

Telecom, and media sectors too were among the percentage gainers with net MF investments up by more than 100 per cent over the year. Net investments in the IT, oil and gas, power, and FMCG sectors showed a growth in the range of 50-100 per cent, while auto, pharma, metals, and manufacturing sectors showed a growth in the range of 25-50 per cent.

Meanwhile, food & beverages, and consumer durables witnessed a decline in weightage. Exposure to food & beverages sector dropped 20% from Rs 2,245 crore in December 2005 to Rs 1,795 crore as 10 MFs slashed their exposure to this sector, while eight funds hiked their exposure to it. Investments in the consumer durable sector dived by 10% from Rs 213 crore to Rs 192 crore.

Top stocks with MFs in Dec'05

Top stocks with MFs in Nov'06

Stock

Value (Rs cr)

Stock

Value (Rs cr)

Infosys

1,820

Infosys

3,805

Reliance Inds

1,669

Reliance Inds

3,334

SBI

1,631

Grasim

2,260

ONGC

1,343

Bharti Airtel

2,146

BHEL

1,216

ITC

2,133

ICICI Bank

1,114

Jaiprakash Asc

2,029

Tata Motors

1,107

BHEL

2,022

Satyam

1,011

SBI

1,997

ITC

951

Reliance Commn

1,877

Grasim

935

ONGC

1,760

Bharti Airtel

904

L&T

1,565

Jaiprakash Asc

879

TCS

1,516

Siemens

875

Crompton

1,407

Crompton

807

Zee Telefilms

1,333

HCL Tech

800

Tata Motors

1,300

M&M

793

Satyam

1,241

PNB

792

Hindustan Lever

1,157

L&T

712

M&M

1,074

TCS

668

Siemens

1,043

United Phos.

661

ICICI Bank

1,038

Among stocks Grasim moved higher over the year from the tenth slot to become the third top held stock by mutual funds, while Infosys and Reliance Industries continued to hold the top two positions, respectively.

Bharti Airtel, Jaiprakash Associates, and Reliance Communications also attracted the fund managers as they barged into the top 10 list. Telecom giant Bharti Airtel, and construction major Jaiprakash Associates moved higher to the fourth and fifth slot from 11th and 12th positions each.

Meanwhile ICICI Bank, Tata Motors, and Satyam witnessed the steepest fall in this list. Banking major ICICI Bank crashed from its sixth place to 20th position, auto major Tata Motors and IT giant Satyam slipped from the seventh and eighth position to the 15th and 16th position respectively.

Reliance Communications, Zee Telefilms, and Hindustan Lever entered the top 20 list, while HCL Technologies, PNB, and United Phosphorous moved out of this list.